I think I’ve been here long enough to post a disgruntled little blog.  During my time here at ecarlist over the past 4-ish months, I’ve spoken to a lot of dealers.  Many of them are engaging in SEO and/or SEM and many are not.  Usually I wouldn’t bash on the dealers who are proactively invovled with Search, but it seems that there is a major disconnect in regards to their spending.

I conducted my own little experiement in which I surveyed dealers who were using some of the more well-known SEM management firms which will remain un-named…uhhhreachlocaluhhhnmm.   Now this study was put together by a huge team of one with an enormous panel of 10.  Here are the results….

10 out of 10 dealers who were spending money on SEM with their “SEM Agency”  had no knowledge of  how much money was going to Google, Yahoo and/or MSN and how much was going into the pocket of their agency who was charging a percentage of the dealer’s gross monthly spend (usually with minimum spending requirements).

Does that concern anyone?  Apparantly not.  Because these firms are sending their weekly home-made Excel spreadsheets that show the dealer is getting “clicks” and apparantly that’s all that matters to the dealer.  They send nothing from the Engines themselves who have great reporting systems that show the actual spend, average Cost Per Click and Click Through Rates.

I’ve heard from some dealers who actually took the time to analyze their SEM campaigns directly with Google that the percentages their Agencies were taking were sometimes as high as 40%.   That means for every $1.00 you spend on Google, it’s actually costing you $1.40…assuming you are getting information on how much you’re spending per-click.

So anyway, for the dealer that cares about what you are spending these days I recommend going with an SEM management firm that either charges you a flat rate (i.e. ecarlist) or a  reasonable percentage with complete transparency.  In fact, I would call your SEM firm today and ask them if you can get a cost breakdown from Google - which they have readily available.  If they aren’t interested in showing it to you, you may want to reconsider who you are spending money with.